Fifth Circuit Affirms EPA Approval of Texas’s Flexible Permit Program (Again)

In Envtl. Integrity Project v. U.S. Envtl. Prot. Agency, 610 Fed. Appx. 409 (5th Cir. 2015) (per curiam), the Fifth Circuit Court of Appeals reiterated its earlier opinion from 2012 that Texas’ flexible permit plan for air emissions did not create a free pass for permit holders to avoid federal regulations and rules for new major sources of pollution. This decision solidifies the validity of Texas’s Flexible Permit Program and provides peace of mind for permit holders.

Under 42 U.S.C. §§ 7401–7671q, the Clean Air Act requires each state to adopt air quality standards through state implementation plans (SIP). SIPs must include a process to govern new pollution sources added by permit holders either through new construction or modifications to existing structures. Major pollution sources—ones that reach a threshold amount of pollution—are governed by stricter regulations than minor pollution sources.

The SIP Texas presented to EPA in 1994 created flexible permits that covered new minor sources of pollution, so long as the aggregate amount of emissions remained below the major source threshold. This allowed flexible permit holders to avoid additional regulatory review for new minor sources, but excluded major modifications.

In 2010, EPA issued a rule disapproving Texas’s SIP because EPA believed it would allow flexible permit holders to avoid following rules for new major pollution sources, despite Texas’s assertion to the contrary. In Tex. v. U.S. E.P.A., 690 F.3d 670 (5th Cir. 2012), the Fifth Circuit Court of Appeals held that Texas’s SIP only covered minor changes, not major ones, which were still subject to more stringent rules. After the Court’s ruling, EPA approved Texas’s SIP.

Several citizen and environmental groups disagreed with EPA’s ruling and brought a petition for review, arguing EPA’s decision was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law,” in violation of 5 U.S.C. § 706(2)(A). Notably, the petitioners did not challenge the Court’s 2012 ruling. The Fifth Circuit decided that the petitioners neither raised new arguments that EPA failed to present in the 2012 case, nor did they challenge the Court’s previous decision. The Court reiterated its previous ruling that Texas’s Flexible Permit Program did not cover new major sources of pollution, and based on that opinion, EPA did not err in approving the SIP.

Bill Cobb was instrumental in the defense against EPA’s assault on Texas’s air-permitting program. While he managed Texas’s efforts to reverse EPA’s denial of Texas’s Qualified Facilities and Pollution Control Project Standard permits, Cobb personally presented oral argument at the Fifth Circuit in defense of Texas’ Flexible Permit Program.